Part B Consumers Beware: ‘Pitfalls, Problems and Penalties’

In a report that included recommendations for improvements to the Medicare enrollment system, the Medicare Rights Center also focused on the existence of issues that often plague Medicare enrollees and how to avoid these pitfalls so as to escape often severe and long-lasting penalties. Besides identifying how consumers may sidestep these issues within the complicated program, the report, entitled “Medicare Part B: Enrollment: Pitfalls, Problems and Penalties,” also called for a streamlining of the enrollment system as it noted that the aging of the American population was occurring “at an unprecedented rate.”

Pitfalls and Problems

To premise the review of the Medicare Part B enrollment process, the authors noted that, “an often reported fact is that 10,000 Baby Boomers turn 65 and become Medicare-eligible each day,” yet, “less well known and commonly misunderstood, are the rules concerning how to enroll in Medicare.” To highlight the issues faced by many enrollees, the Medicare Rights Center reviewed more than 15,000 calls received by the Medicare Rights’ national hotline in 2013 and found that almost one-quarter of the calls were from individuals that were experiencing some type of challenge regarding enrollment. Of those callers, 38 percent were “navigating a specific hurdle,” 28 percent did not understand the enrollment periods, and 13 percent were not able to determine whether they were eligible for enrollment in Medicare. Another area that the report identified in terms of what types of challenges that consumers were experiencing during enrollment was transitions from existing coverage to Medicare. In sum, the Medicare Rights Center found that the majority of issues for enrollees fell into one of these three categories: (1) navigating coordination of benefits rules; (2) understanding enrollment time frames; and (3) dealing with late enrollment penalties.

Penalties

In addition to coverage gaps due to failure to enroll in a timely matter, “higher out-of-pocket costs in the form of lifetime late enrollment penalties (LEPs) may also apply.” While some may be able to appeal LEPs through a process called equitable relief, in which those who can prove they were provided misinformation from a federal source about enrolling in Medicare are granted immunity from those penalties, it is estimated that in 2012, approximately 740,000 Medicare beneficiaries paid Part B LEPs.

Fixing the System

In addition to educating consumers regarding the rules of Part B Medicare enrollment, the Medicare Rights Center also recommended steps to take in order to improve the process itself. Among the suggestions for streamlining the complicated process, the report included the following: (1) increasing education for soon-to-be enrollees; (2) simplifying enrollment periods; (3) increasing avenues for consumer relief; and (4) filling gaps in knowledge. With regard to the final suggestion, the report noted that “the true impact of enrollment changes on newly Medicare-eligible seniors and people with disabilities is difficult to discern,” and as such, “Congress should take steps to analyze the true scope of these issues.”